Leeds council leader blasts ‘grossly unfair’ National Insurance tax hike for social care

Government plans to raise taxes on all workers to help pay for NHS backlogs and social care reforms have been called “grossly unfair” by the leader of Leeds City Council.

Prime Minister Boris Johnson announced plans yesterday to increase National Insurance contributions by 1.25 per cent – paid by both employers and workers, before a switch to a separate tax on income from 2023 – which he believes will raise around £12bn a year.

The money will first go to clear NHS backlogs following Covid-19-related disruptions, but it is hoped in the long term that it help pay for care sector reforms in the UK.

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The plans have been heavily criticised by opposition politicians and social care leaders, as they claim the changes will raise nowhere near enough to address the problems in the UK’s care sector.

Now the leadership of Leeds City Council has warned the changes could have a damaging effect on younger people and those on low incomes.

Coun Fiona Venner, the council’s executive member for health partnerships, said: “Social care is once again being neglected. The Health and Social Care Select Committee previously advised the government that an additional £7bn per year is needed to adequately fund social care, however this announcement suggests that nowhere near this amount will be raised by these tax increases.

“The government needs to properly address how it will fund fair pay for social care staff, so that it can be competitive in the labour market; with staff receiving a reasonable wage; with a clear career path development.

“There is also no recognition of adults with disabilities, and it doesn’t recognise that younger people use social care.”

In an announcement on September 7, Boris Johnson said the Government will impose a £12bn-a-year package of tax increases from April 2022 to tackle NHS backlogs and reform social care.

All working adults, including those over the state pension age, will pay the 1.25 percent Health and Social Care levy; and the rates of dividend tax will increase by 1.25 percent to help fund this package. Employers will also be asked to contribute.

Leader of Leeds City Council James Lewis said: “There is gross unfairness in raising the rate of National Insurance. This disproportionately targets younger people and people on low incomes.

“Especially after the government have already asked the public to cover the cost of cuts to local authority funding by levying the social care precept on top of council tax.”

According to Government figures, the changes mean those earning a salary of £20,000 will pay an extra £130-a-year, those earning £30,000 will pay an extra £255.

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